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| PRICE ALERT: Silver has dropped 80 CENTS this morning and gold is down $20. Take advantage of falling prices and our product specials. | | |
| Money Metals News Alert | January 13, 2025 – Volatility in gold and silver prices is increasing. After strong performance last week, both metals have pulled back sharply again today.
Demand for available 1,000 oz silver bars and kilo gold bars is exceptionally strong in the U.S. currently.
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Some of this demand stems from speculation that Donald Trump will impose tariffs on imported gold and silver, and investors are grabbing available stocks before any new tariffs are in place.
There is a significant premium being paid for bars in the U.S. versus London spot prices.
The arbitrage opportunity is driving significant buying in London and elsewhere for fast export to the U.S.
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This is a problem for shorts who need to cover their position in the near term. Their troubles may be compounded because inventory in the London Vaults has been in decline.
And while eligible inventories of bars have risen slightly in the U.S., the most recent report shows registered inventories – bars with warrants attached and ready for delivery in a Comex warehouse – are not rising.
Tightness in the large bar market could put a squeeze on concentrated short-sellers unless they have control of deliverable metal inside the U.S. already.
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 | Gold : Silver Ratio (as of Friday's closing prices) – 88.3 to 1 | | |
| Sound Money Would Check Government More Than DOGE Can | | | |
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Many Americans are rooting for Donald Trump and his appointees to succeed in their herculean task of slowing or reversing government growth.
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Along with the ad hoc working group dubbed the "Department of Government Efficiency (DOGE)," there is much discussion about how runaway big government might be stopped. But there hasn't yet been talk about how to keep it that way.
Making sure future administrations and legislatures can't undo or erode important reforms needs to be part of the plan.
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Laws, unfortunately, aren't enough. The Founders drafted the U.S. Constitution to put strict limits on the power and size of the federal government. They would be deeply saddened by how faithfully that document has been interpreted and followed.
While the Constitution gets most of the attention, it was not the only mechanism our Founders implemented to limit government. They gave us free and decentralized money and purposely avoided creating a central bank.
In reality, a true sound money system could be the most effective constraint on government growth and power.
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For the majority of the nation's history, gold and silver served as the official money. The Federal Reserve Bank was established in 1913, but the currency it issued was redeemable in gold until President Nixon put a complete end to that in 1971.
It is no accident the period between 1776 to 1913 – and, a lesser extent, 1913 to 1971 – was one of limited government.
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It is also easy to see what happens to the size of government and deficit spending when politicians throw off the shackles of sound money and embrace fiat money.
According to the Cato Institute, Government spending as a percentage of overall GDP is roughly 2-½ times larger than it was in 1971. It is ten times what it was in 1913, when the central planners hatched their Federal Reserve scheme to establish a government-charted, privately owned banking cartel.
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The chart below shows the growth in federal debt. The explosion was not possible before Nixon pulled the plug on the gold standard and the Federal Reserve replaced gold and silver backed currency with Federal Reserve Notes.
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Since the gold standard went completely out the window in 1971, the only "constraint" on federal debt has been the debt ceiling, which legislators routinely adjust higher.
The current Congress will undoubtedly raise the ceiling again in a few months. The law has effectively provided no limit, but a gold standard worked great for nearly 200 years.
If the Trump administration succeeds in reining in government, restoring sound money is the best way to ensure the politicians who come next won't screw it up.
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| This week's Market Update was authored by Money Metals Director Clint Siegner. | | |
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| This copyrighted material may not be republished without express permission. Offer only available through email promotion. Offer does not apply to previous orders and may not be combined with any other offer or program. Special shipping rates or other restrictions may apply to international orders. The information presented here is for general educational purposes only. Money Metals Exchange and its staff do not act as personal investment advisors. Nor do we advocate the purchase or sale of any regulated security listed on any exchange for any specific individual. While our track record is excellent, investment markets have inherent risks and there can be no assurance of future profits. You are responsible for your investment decisions, and they should be made in consultation with your own advisors. By purchasing from Money Metals, you understand our company is not responsible for any losses caused by your investment decisions, nor do we have any claim to any market gains you may enjoy. Money Metals Exchange is not a regulated trading "exchange" as defined by the CFTC and the SEC. | | |
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